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P Chidambaram's five-point action plan for economic revival gets PM's nod
NEW DELHI: Prime Minister Manmohan Singh has endorsed finance minister P Chidambaram's five-point action plan, putting much-needed reforms in fast-track mode to perk up sentiment. "I outlined yesterday a series of long-term measures. Later in the day, at a meeting the prime minister endorsed all those measures," Chidambaram told reporters here on Friday, sending the BSE benchmark index up 350 points. "You will see that these decisions are taken in the remaining days of June and July and they will bring benefit to the economy."

A day before, the minister had announced a to-do list that included tackling issues related to liberalisation of foreign direct investment caps, simplification of norms for portfolio investment, coal pricing and coal block allocation, and a framework for pricing of natural gas. The package, however, had failed to enthuse investors and the Sensex had fallen for the third consecutive day.

Chidambaram had discussed these proposals and the state of the economy with Singh, Chief Economic Advisor Raghuram Rajan and department of economic affairs secretary Arvind Mayaram.

Policymakers, who are already struggling to revive growth, have a new worry in the form of the rupee, which touched a lifetime low of 58.98 earlier in the week on apprehensions of early withdrawal of quantitative easing in the US. "It's long-term measures that will bring stability and growth to the economy. One doesn't look at these matters on a day-to-day basis, one has to take a long-term view," Chidambaram said.

The finance minister has said that the government's FDI liberalisation agenda will look at all sectors, including defence, besides steps for a simpler framework for foreign portfolio investors. Market regulator Sebi is expected to take up on June 25 the recommendations of the KM Chandrashekhar Committee on a new simplified regime for portfolio investment.

According to Chidambaram, the measures taken by the government since August has brought down inflation and fiscal deficit. Last fiscal, he had unveiled a fiscal consolidation programme that led to a sharp reduction in the fiscal deficit to 4.89 per cent of GDP. "Measures that we've taken since August have brought down inflation; measures that we've taken since August have brought down the fiscal deficit. Therefore, the temporary problems that we face cannot be solved by quick fixes. It will be solved by continuing to take long-term measures," he said.

The Economic Times: Jun 15, 2013, 05.00AM IST
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